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LONDON (HedgeWorld.com)--Man Group plc* shares went down by 70 pence, to 1175 pence (US$21.26), in morning and early afternoon trading on the London Stock Exchange as the market took in the information that performance fee income for the first six months of 2004 is about half the level for the same period last year.

Nevertheless, underlying earnings per share are expected to be up 25%, due to growth in management income on investment products and strong returns from Man Financial, the futures brokerage that is part of the FTSE 100 company that runs the world's largest freestanding fund of funds business.

Demand for the firm's funds has been strong, and redemptions remain at the low end of long-term experience, said Man Chief Executive Stanley Fink, in a statement. Significant losses in Man's futures program, which underlies many of the investment products, has led to reports that the manager might suffer a net loss in assets.

Some hedge funds have been short selling the stock, which was on a downward course since April but perked up in August before dropping again. (see Previous HedgeWorld Story)

But Mr. Fink said about US$7 billion was raised in the first six months, against US$2.1 billion in redemptions. Total assets under management are $39 billion.